is is always a market somewhere. i like to find it for you right here on "mad money." i'm jim cramer, see you tomorrow. good evening, everybody, i'm jim kudlowing, this is ""the kudlow report." "terrorist zoek dzhokhar tsarnaev was formally charged. he has also been mirandized already, which means he could be lawyered up, which means, we may not get the information we need. this is an outrage. he ought to be compared an enemy combatant. we'll have the latest on these late breaking developments. also tonight, the faa says the sequester is starting it to start furloughs.

that means major delays at airports. this is all politics. we'll talk to one airline pilot who says the faa action is bologna. and the senate is beginning to vote to improve an -- approve an internet sales tax that will wreck small business, dan consumers and amount to a huge tax grab for state governments across the country. a terrible idea. ""the kudlow report"" begins right now. ♪ all right. charges were filed against terror suspect dzhokhar tsarnaev. nbc news' pete williams joins us with all the details. good evening, pete. >> well, the combination of evidence here the government says they have, larry, the main thing here is from a surveillance video from the scene of a second bombing, they say they can see dzhokhar tsarnaev come into view. they see him work his way into the crowd, take his backpack

off, lower it to the ground. they say still photographs show it down on the ground at his feet and they say one of the most telling moments is when the bomb at the first site goes off. everyone around him looks, virtually everyone, they say, but he is calm, staring straight ahead, not reacting at all. he briefly glances that way, appears to use his telephone, walks away, 13 seconds later the bomb goes off at his location. that's the photographic evidence. next is the forensic evidence. they say both the bombs were made in pressure cookers. they say the inside they had green hobby fuse and also bee-bees that were somehow had an ad he'sive on them. they owe owe an adhesive on them. they say the two suspects brothers, threw out of their car another pressure cooker bomb, which the fbi says was made with exactly the same brand of pressure cooker. it also contained the similar

fuse and bee-bees with glue on. they also say when they searched dzhokhar tsarnaev's dorm room at the u-mass dartmouth room, they found a black jacket and a white hat similar to what the person in the fbi pictures released last thursday night was wearing. so that's the forensic evidence. finally, there is new details about the carjacking that happened thursday night. say say it happened when the owner was sitting in the suv, one of the two brothers tapped on the window, opened a door, pointed a gun at him and said, "you may have heard of the boston bombings, we did it." they say the man showed him, there were bullets in his gun, they said, "i'm serious" they drove to another location and picked up the other brother. finally the carjacker escaped when they stopped at a gas station. all that, they say, merits two charges, both of which are federal bomb charges in es tense -- essence, one is a

terrorism charge. they carry if potential for the death penalty. >> pete, were you surprised, was anybody surprised they mentioned the m.i.t. cop that was killed? >> no, because there is a federal case, probably the federal government doesn't have jurisdiction over get but i would say two things about that, larry. first of all, remember that this is not the end game for the government. this is a place-holder charge. this is to start the process going. there has to be a grand jury under the federal system. there will be an indictment that will undoubtedly cover more ground. as they head towards trial, if there is a trial, they can subsequently add material to that indictment. so i don't think that's surprising. >> will there have to be a change of venue at all? >> well, the lawyers will certainly ask for it, be you the federal standard is very tough. you have to basically say there is no way to put a jury together that wouldn't be prejudiced. now, there was a change of venue in the oklahoma case, that bombing was in november.

the person charged in the next wave of hijackers, that was here in suburban virginia not far from the pentagon. so you don't always get a change of venue. it's hard to get in the federal system. >> all right, many, many thanks, pete williams, appreciate the update. joining us now is u.s. former attorney joe degeneva, i go to you, enemy combatant is a key word here. the administration has ruled out using that term. i am informed, joe, that miranda was -- the suspect was mirandized today. i don't know exactly what that means. it doesn't sound like they will have enough elbow room to ask questions. what is your take? >> what happens was there was resentment in the hospital today where a u.s. magistrate average, prosecutor and a public defender were in attendance, in explaining the charges to the defendant, he was told he had the right to remain silent, that an attorney would be provided

for him and he was asked if he understood those things. he did. he was told he did not have to make any statements. so the so-called period in which they were going to glean all of this intelligence from him has ended. if he chooses to speak, it will, no doubt, be over the objection of his public defender and now that he's lawyered up, my guess is that the talking is over. >> was this a mistake in i mean, a lot of people calling for enemy combatant status. that would have given a lot more time for questioning. he can be brought back into the federal system. at least he'd have a period where he wouldn't be all lawyered up, was this a mistake, joe? >> i don't think there is any doubt it was a mistake. there did not have to be an arrest. he could have been handled as an enemy combatant. he could have been held for 30 days an interrogated in the same environment where he is now. obviously, there would be no enhanced interrogation techniques. there would be an effort by skilled investigators to bond

with him over a period of time, at the end of that period, he could have formally been arrested, charged, what what happened today could have happened 30 days from now. this is what the obama administration wants. they don't care about the intelligence. they made it very clear they want people to have lawyers, to have trials and if we lose intelligence in the process, they say that's regrettable but that's just the way it is. that is unacceptable to me. it should be unacceptable to anybody who cares about preventing future terrorist attacks. >> mitch epnor it has my back up. who cares about my back. all i'm saying it sounds like this is the criminal justice model not a terrorist bombing warfare model. that's something that if administration has been accused of. did they make a mistake here? >> well, i'm going to agree it is a criminal justice model and not a terrorist enemy combatant

model. that's clearly true. >> why is it true? >> it's true because he was charged under a criminal complaint today. he was brought before a magistrate. they followed standard operating procedure, every appearance to a criminal complaint t. magistrate always, always informs the defendant that he has a right to a lawyer, that he doesn't have to make any statements and there is a lawyer that is provided for him and here's the federal public defender and i say this with great trendation -- trep idation because joe has been an idol of mine for many, many years. i respectfully agree this wasn't a mistake. this is the way the criminal justice system is supposed to work and i disagree respectfully that the talking has stopped because any federal public defender worth his salt in this situation is going to understand that the evidence on guilt is overwhelming and the only chance that this individual has, in my

view, to avoid the federal death penalty is to show immediate contristian and to -- contrition and try to make the claim and i am not making this claim. i'm saying this is what a defense lawyer would do if he was in this silgs, try to -- in this situation, try to make the claim that he was under the svengal-like influence of the older brother. i can't imagine that working. >> i don't care about get that's the thing, mitch says you are his idol. you guys have a big, large, disagreement here. even a nonlawyer like myself sees disagreement. as far as i know, if you invoke this enemy combatant stuff, you take him out of play. you take him away from the lawyers. you ask questions for i don't care a month or two. you can have the option of putting him back into the federal criminal system. that's not the issue. the issue is not prosecution. we know he is getting life. the issue is in a war, don't we

need more information? >> well, yes, larry, obviously, the answer to that question is yes. clearly the enemy combatant model would be the way to insure we definitely got the information we needed. now, because they have chosen the criminal justice model, because he's been advised of his rights today in his hospital room by a magistrate with his defense attorney present, who was appointed for him, the public defender in boston. he can, obviously, if he chooses to do so cooperate in order to get the death penalty taken off the table and try to negotiate life imprisonment without the possibility for parole. but that is going to be a much more difficult road to decline now. he has a lawyer. i'm sure the lawyer is a terrific lawyer. ba us the public defender services all over the united states is excellent. they have great people working in them. i admire them greatly. i admired them when i was a u.s. attorney. we are at war. much to if disappointment that

people don't want to admit it is in the united states and elsewhere and after all the wonderful work done by our counterterrorism people over the last year since september 11th, 2011, that we have a model for interrogation, not with enhanced techniques, but with really great people in the agency and the bureau who can work with a subject over a period of time. i really deeply regret that theed a bhinstration chose this route. because they may have sacrificed ultimately information now when we need it now. not 30 days from now. now when we need it. >> all right. there may be a whole terrorist cell out there. we will cover that in the second segment. i will leave it there. mitch epnor. thank you very much. we have much more in this developing case. we have so many unanswered questions in my mind. as an aside, don't forget, premarket capitalism is the best

bet. we need a safe country in order to have our capitalist ways. i'm larry kudlow. we'll be right back. epner. w

back to "the kudlow report." the boston bombing suspect is now charged with using weapons of mass destruction to kill. it's a crime that carries a possible death sentence. joining us now is former new york police commissioner howard shaffer. we also have retired fbi special agent in charge of the new york and houston don clark, a former cia officer gary bern teen is concerned with the veterans for america. don clark, let's begin with you. we appreciate you coming back on. some reports you may know is the fbi is hunting a terrorist sleeper cell linked to both brothers tsarnaev. they specially trained the brothers the cellphone detonation device was very sophisticated. what do you think of this sleeper cell theory? >> well, i think it's out there. i think it's something of a society and certainly the law

enforcement and the intelligence community, they clearly know that this is not a hoax. this is not something that somebody is coming up and developing and so forth. those organizations and the type of organizations that are really fertilizing terrorist activities, it's real. and it's real for the united states. i think we've gotten a piece of that here in the last few weeks here, based on the activities that we've taken place there. if you talk to many of the law enforcement people and so forth, they will look back and say, "this had to be an operation by these two young men that was planned and it was worked over years, not over just a few weeks or so, over months and over years that they have been there". >> chief shaffer, a lot of people are saying this, there are 100 agents or more looking for this cell. these two guys couldn't have done it. they are amateurs, what is your take on this?

are we going to wake up and find out there was a much bicker conspiracy. >> if you look at what happened, they had sophisticated weapons. they had lots of weapons rifles, pistols, multiple pressure cooker bombs. they had six other bombs at their apartment. the question is, who financed it? where did they get trained? what was he doing? what was the older tsarnaev doing in russia during that time? this doesn't sound like a couple kids getting together making an unsophisticated bomb, especially when you have simultaneous explosions 12/13 seconds apart. that's not easy to do. this was a sophisticated thing. >> this sleeper cell, as a follow-up, we're talking about here in the united states. >> you know, it's interesting. people talk about sleeper cells. you know, the command and control does not have to be a sleeper cell. it could be the internet. the fact is that anything that could have been done in boston could have been found on the

internet, could have been communicated over the internet. so, you know, you don't have to have the formally kind of cells we used to have. the things that keep people in charge of law enforcement agencies up at night are these individuals who are radicalized but can communicate through technology. >> right, gary, let me ask you this, where are these two kids? monday night the bomb goes off 2:50 p.m. monday. where were they monday? where were they tuesday? where were they wednesday? we know they resurfaced thursday when their pictures were out there? where were they? why didn't they flee? this is a part of the mystery. if you ask me, they're making another bombing some place, but what's your take? >> the fact that they didn't run probably indicates they were safe and were going to do different attacks. a lot of terrorist organizations like al qaeda will train people to attack like in east affect, they don't give them an exit plan and they wind up doing this stuff on their own.

they don't care if they get caught. they want them to go after a community or a neighborhood. then they want them to fight to the death in the end because it makes for great press. >> do you think the next target was boston or some are speculating new york city or some place else? >> i don't know. you know, possibly locally. because they didn't move. i wouldn't have been surprised if they did something else in boston. the point of the matter is these groups see it as disposable. they're there to extract maximum violence, if they die, they die. they don't carant them. they care about causing violence against us. i am concerned, of course, there was direction, control, lonlistic am support from the outside that this is not over and we need to know the intentions of the chechens. the only way you would have gotten it is with sus stained contact with this other brother, i am opposed he is not

classified as an enemy combatant. that would have given us time. you can get capabilities, the only intentions is coming out of that boy's mouth, he will tell us about the recruitment process. >> he may or may no. we don't know that yet. done clark, there is an an again-off again operation. the fbi told them to be aware of these guys a few years ago. they were investigate. the matter seemed to end. it picked up again. a lot of people are saying the fbi should have stayed with it. now the mother says the fbi did stay with it. one of the things i don't understand was the role of the fbi. were they birddogging this guy, particularly the older brother? >> well, those are all good questions. i do think those questions merit good answers for the citizens of the united states and certainly the people in boston there. because if there was information out there some place and somebody did not handle it

properly and did not investigate this case in the manner in which they should have, then i think that needs to be brought about. whether it's the fbi or any other government agencies. if they failed to do what they should do to keep the public safe here, then we need to take a look atiment. i have no problem whatsoever with them taking a look to see if there was something that could have been done, perhaps could have been done to cause this not to happen, then we need to know about it. the citizens need to know about it and if it's not, then we can move on. if i were a part of the organization today, i would say, let's go for it. let find out, because we should have known. >> i'm not making a criticism, by the way. i have the greatest respect. i'm raising a question raised by a lot of people. chief shaffer, there is another debate, a libber tarian debate. we have too much surveillance, that served us well in boston,

new york city you know well, there are 3,000 cameras alone in lower manhattan, another 4,000 in the subway system. in london where the attack is not completely different from what we have here, they have even morement should we continue to have major public surveillance? i'm not talking private, i'm talking public. >> absolutely. you have no expectation of privacy in the public place, the more technology we use, the better we will be able to combat terrorism. if not for the cameras in this case, we never would have found out who was involved. my question is, who was the fbi agent who identified these originally? who interviewed them? why did it take the public to identify who they were? >> why do you think that is? >> that's a question that needs to be answered. we need to find out who was the fbi agent, was he in boston? when those pictures appeared, why didn't he say, i know those people, i interviewed them.

>> on top of that, it was, in fact, the public surveillance, whether it was department stores or whatever that enabled people to find these guys before they hit again. that's the way i look at it. before they hit again. >> without those public cameras, we would be looking. >> you agree, this is a necessary part of modern life as we wage war against those who waged war against us? >> absolutely. i remember we put cameras in the housing developments for the first time, the aclu complained about it. the truth is, there is nothing safer noer the public. >> it's not private. this is public. >> we have no expectation of privacy in a public place. >> especially nowadays. we appreciate, sir, don clark as always, gary bern teen is, thanks for helping us out. now, also a busy day for the feds pursuing some financial crimes. eamon javers has if latest on -- has the latest on an insider bribery case.

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a former coo of office depot has been charged with insider trading and ralph lauren settled the bribery case. i'mch javers joins us with all the details. good evening. >> good evening, larry, the sec charged corporate executive mark begelman with insider trading based on information he learned from the professional world

president's organization. the sec said beg elman a chief operating officer at home depot gleaned information about the pending merger from a member of the group and purchased 25,000 shares, about to make nearly $15,000 in illegal trading profits. begle begelman's attorney had no comment. they say they bribed officials in argentina. the u.s. government allege they were paid by a ralph lauren subsidiary to obtain dleerns of merchandise and sometimes to avoid customs inspection altogether. the government noted ralph lauren disclosed the incidents, itself and said that was a part of the reason it decided not to prosecutor. the attorney says the company did all the right things in this case and is thrilled with the outcome. there are new faces at the

sec. they announced that acting director george kennelos and andrew zerney have been maimed in charge of the code enforcement. >> many thanks, eamon javers, we appreciate it. now, the faa unnecessarily furloughing air traffic controllers and stalling out flights. this isn't all politics. there is a much better way to handle this. we will ask a top airline pilot to tell you next up on "kudlow." bny mellon combines investment management & investment servicing, giving us unique insights which help us attract the industry's brightest minds who create powerful strategies for a country's investments which are used to build new schools to build more bright minds.

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a quick update on our top stories. the surviving suspects in the terror bombing now faces federal charges that could carry the death penalty, but he is not charged as an enemy combatant. in a few minutes, we will talk with a u.s. senator who is not at all happy about that. the faa goes through furloughs of air traffic controllers as part of the sequester. today we are seeing delays. about a quarter of flights delayed at major east coast airports, delays running maybe an hour. this is all bungling if you ask me. it's all politics by the faa, which is following the white house lead to stop spending cuts

and raise taxes ned instead. here now is vaughn cordell, an airline pilot and airline analyst. joining me for the remainder of the program is my great pal mark simone, talk show host. mr. cordell, welcome. why is this necessary? why could there be plans ahead? why couldn't the faa just kept esht people going? >> well, thanks for having me on, larry. well, there is clearly something wrong when the dod and faa knew about the sequestration two years and waited until the last minute, literally last week to brief the airline itself orally that there would be cuts in capacity as a result of cuts in headcount in the atc and inspectors and another personnel. these personnel, by the way, are considered, historically, they consider essential employees. they have never been cut in the past. so why now and why at such a

late component? >> that's the thing, this idea of essential employees. i have been through shutdowns when i worked for reagan. you have essential and nonessential. controllers are essential. people say to me the faa in general has a larger work force today than it did last year and the year before. so they didn't to cut the controllers out. they had other places they could have cut. >> they could have cut in a lot of places, we looked at the faa truftd fund -- trust fund which collects from the airlines to pay for the dod. they are running about a $4 billion deficit which comes out of general funds, ie, taxpayers. so, clearly the government in my view is a bloated, inefficient agency that is not serving the public well. these cuts are ill conceived, but they do need to cut costs or raise taxes because they cannot continue with deficit spending. so it fits in with the broader

problem of the government spending basically 40 cents on every dollar. so how do you solve this problem? so the government has elected, ie, the administration directed the dot to cut the headcount basically 10%, which is going to cause a lot of delays, instead of increasing productivity and cutting pay. >> mark simone, is this just politics? >> absolutely. the government is the only thing that has something called nonessential workers? aren't there massive fund the faa has to do things like refurbish buildings or modernize airports, open new airports, can't the cuts come from something like that? that would make sense to me. >> the chairman committee, bud shuser said they could have gotten rid of outside contractors, cut down travel allowance, cut down suppliers, cut down consultants. i hope there is an oversight in

this. again, isn't this the obama administration making the sequester as hard as possible so they can get rid of it and not cut suspending? >> absolutely. political theatre. but you are playing with people's businesses, because they have to travel, people's vacation, people's lives. a lot of essential travel for all sorts of reasons that you are interfering with. i bet if you went to washington, into that big huge faa building. if you were an efficiency expert. i bet you could find a way to cut that. >> 20 minutes. i reckon 20 minutes. cordell, they had a whole bunch of months to do this. why'd they wait until the last minute? that's why i'm so suspicious of this that it's just politics. >> well, you have incompetence at the top of the dot, the token republican for this administration, he has been about as ineffecttual as any secretary i have known in 30 years in the dot. they don't have the right programs.

he basically spends money but doesn't look at the massive challenges that need to occur in these agencies as a part of the u.s. government, privatization, there is no country in the developed world that would have the sequestration problem that we have today because it's a self-providing system. in other words, the users of the system pay the providers atc controllers, for instance, directly to agencies. it's a corporatization, a part of privatization that we do not have over here. >> or why don't they just knock down -- i hate to say this, but there are very small little airports with towers, some people said they should have gone years ago and loaded up everybody for the big save, which is where the problem is. it don't have to be a genius to see that. >> well, they are shedding -- shutting out 149 towers, which in practice doesn't need control personnel because pilots can land at these less-used airports on their own. and they are taking some action,

but the fact that they waited until a week before the cuts went into place to provide an oral brief of the airlines sri dick lus. so there -- so -- sri dick lus. so there is something that can't go unnoticed. >> let's switch gears, do a little stockmarket work. shares up slightly today. the dow up about 20 points, but everybody is talking about a spring swoon for the economy. isn't spring a time for revival and resurrection. let's bring in our ace investor to get his forecast on the potential swoon. jeff klein, chief strategist, one of the best of the best. good to see you, jeff. why is it so gloomy all of a sudden? golly, this is not like last year. you a saw the housing numbers today, home sales off a tiny bit, but 11/12% price increases year on year, that's totally

different from prior years. >> it is right, the housing situation is better. the auto sales are good. there are a lot of things in much better shape. but the market is all about expectations. the fact is economic data as solid as it has been lately has come in weaker than expectation, so have profits and importantly revenues lately. it's not that we see them falling off a cliff, if expectations got a little too high or rosy, it's funny, larry, as we looked at this year back at the end of last year, we laid out scenarios, a bulk case, down the middle base case, stocks have taken the bull path. bonds are kind of right in the middle. it's interesting. the markets are agreeing with each other here. i think they come together over the course of the second quarter. you will probably see a little pullback in stocks. >> pullbacks aren't very attractive, very healthy. i want to go to this commodity story. two things, number one, i'm glad the prices have come down a bit.

now i see talk about commodities. you look at spot commodity index, they're down from the peaks not a lot. they're flattening out. a little lower commodities is good for most americans, it's good for consumers. it's good for our businesses. we're an importing company. even oil prices coming down below $90-bucks. that's good. why aren't people factoring that into their swoon forecast? >> i think it's down the road t. concern is maybe it's affecting more growth presently than we accounted for. maybe china is softer than we thought about. maybe europe's downturn is maybe deeper than we had thought. i think that's the sign, we're worried about we're getting from energy prices, from gold pricings, from copper prices, copper suggesting that maybe things are a bit softer. now, maybe those prices pulling down, generating some activity. certainly, we have seen a lot of interest in physical gold.

maybe we get that demand as well. right now, i suggest again, maybe investors have been a little too complacent about the growth sector. >> i'm a big fan of as you go up, a little corrections along the way. that stair-step pattern is the most attractive to me. it's the way i like to go. >> oh, i like get stair-step pattern. what do you think of that? >> i agree with it. it's the pauses that refresh the markets. listen, we have gone a while without a 5 or 10% pullback. the markets get brittle. you start to see bigger drops. my big concern is we get investors come back to this market after five years of avoiding stocks, they need to invest in stocks for the long term. first they come in, they get that 5 or 10% drop. i'd like to see them come in on a pullback so they get rewarded and not get their fingers burned. >> not all earnings are bad. we've had some disappointments. but we had a good report today

from netflix. i want to know one thing, why are people obsessing so much about sales revenues? in other words, as an investor, i want the rate of return on equity capital, which comes from earnings. that's what interests me, profits. i know the world economy is slower than usual. therefore, i know nominal gdp and sales revenues will be slower, but if profits are rising, that gives value to these companies. why do people not focus more on earnings and focus more on revenues so much? >> earnings are what matters the most. it's difficult to get earnings to rise at this point in the cycle, cost-cutting has gone rampantly through corporate america. you got to get a little revenue growth to do get i'm afraid with a weak picture, it's hard to generate earnings growth. we have seen that now for the last several kwafrters, the

expectations for q3 and q4. >> if we get 5% earnings, i would take get if we get revenue growth at 4 or 5%, i get get productivity, you know, cost-cutting, specialty sales, business is very durable, pristine balance sheets. it's just hard for me right now, given interest rates and money supply and a whole lot of factors, particularly the baggage of japan to get two bears. i'd like to get your correction. i think mark simone is right, i give you the last word. >> jeff -- >> i give you the last word. >> just the last word, i do think you want to buy into this bull market. is it over yet? pe multiples. that's been true since world war ii. we got a lot more to go. definitely you want to buy into the dip. >> thank you very much. a big question right now,

why is the administration allowing the boston terror suspect to lawyer up, already, today? instead of properly identifying him as an enemy combatant. it's not just the prosecution. it's the national security information that we need. our next guest, a u.s. senator, says charging him as a civilian was a big mistake. she'll be up right next.

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don't wait to ask your doctor about spiriva. enemy combatant. we will prosecute this terrorist under u.s. law. the united statess citizens cannot be tried in military commissions. ed the important to remember that since 9-11, we have used the federal court system to convict and incarcerate hundreds of terrorists. >> that was white house press secretary jay carney earlier today and this afternoon we learned that the federal authorities have charged boston bombing suspect dzhokhar tsarnaev with a conspireing to use a weapon of mass destruction. all right. it's a weapon of mass destruction charge. in the name of national security, wouldn't it have been wiser to treat the boston bombing suspect as an enemy

combatant, which doesn't necessarily take him out of the civilian federal trial system. here now to tell us about this, we will read this new hampshire republican senator kelly ayat. you have been very outspoken on this enemy combat tavent stuff. we learned earlier, joe degeneva, a former u.s. attornaa smart guy, he says the lawyering up process has begun. >> it has. >> they have mirandized it. we may not get the opportunity to get answers. >> larry, we know from a transcript released because of the initial proceeding with charging him in federal court, he was advised of his miranda rights. here's the problem, larry, i think the american people want two things, justice, they also want to understand what he knows, whether he is connected to a foreign terrorist group and make sure we have the information to prevent future

attacks. the problem is if you bring him initially right into the court system in the federal courts, you have to give him miranda rights. then he is told he has the right to remain silent. that has already happened. so what information did we lose to progressive conservative our company and prevent future attacks. by the way, yes, he should be tried in a physical court. there is overwhelming video to do get we should be holding him initially as an enemy combatant until we know what he knows about future attacks, ties to this organization to be tried in the federal court system. >> right. see that's the thing, i think jay carney was very disingenuous today. you are not taking him out of the court system. >> no, not at all. >> you are postoning that to get the information you described. then he goes right back into the federal court system. i want to ask, does president obama understand that this is not just an ordinary crime? this is a jihad against the united states? that's really at stake here. the thinking, the thought

process, do they get that senator ayofte? >> here's the problem, i don't think they want to acknowledge we are at war. we recently captured osama bin laden. his son-in-law. he was advised and brought through our federal court system instead of guantanamo bay. we are not talking about that here. that is how this administration is viewing this. what happened was an act obviously of war to have a terrorist attack like how boston was locked down and what happened. so we need to make sure we can prevent future attacks on our country. if you mirandize this, we're turning this over to defense lawyers. defense lawyers aren't bad people, we don't want to turn our intelligence gathering over to them right now and this terrorist. that's where we are. >> well, this public safety exception about much was made late last week, it doesn't seem to matter too much. it doesn't seem to matter a hill

of beans if they mirandize him today. it seems like, i hate to say this, it was a good story. they caught him. they nailed him. they got the rest of it in rapid time, given aid to the law enforcement process. >> i think we were all grateful he was captured alive, particularly because we wanted to understand whether there were future attacks planned and if he was tied to anyone else or any other organization, particularly a foreign terrorist organization. so this is -- i really think this is so wrong because we owe it to the american people to feind out what he know -- to find out what he knows, and to hold him accountable. we can do both here. unfortunately, their decision to go down the federal trial route, not to hold him as an enemy combatant and not find out what he knows is not good to make sure we have everything to protect the nation. >> senator ayotte.

stay with us please. we have a final push for a new internet state sales tax. just what we need, a revenue grab. it will definitely lead to massive spending. we will debate that next up on "kudlow." i've always kept my eye on her... but with so much health care noise, i didn't always watch out for myself. with unitedhealthcare, i get personalized information and rewards for addressing my health risks. but she's still going to give me a heart attack. that's health in numbers. unitedhealthcare.

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this week on legislation for out of state retailers to collect online sales tax.

the marketplace fairness tax has a place on amazon.com, but it's going to do great damage to smaller online business and consumers who will wind up paying a tax grab for states. who needs it? it's anti-growth. we are back with senator ayotte from new hampshire. we are joined by former cbo director dan griff if it, old -- griffith. this is a terrible idea. why are you supporting it? >> it's a good idea. a few states don't collect sales tax. it means that everybody else in the country is subsidizing their employers. when you say it's bad for small business, i don't understand why. it's the small brick and mortar companies that are being hurt by the current law and, therefore, we're losing employment in states among small retail outlets not on the internet because we're subsidizing thee

other states who don't collect the sales tax. >> senator ayotte, your response. >> my response is this is a big money grab from the states. can you imagine requiring these online businesses to collect for almost 9,600 tax jurisdictions throughout the country. talk about burdens on businesses. by the way, this is big retailers and business lining up for smaller online businesses to have to do their tax collection for states. it is so wrong. actually the last thing we should do and a precursor to other things they will try to grab using the internet including taxing the ber net in my view. >> i wasn't for if sales tax until i saw art laffer on this program. now i can say i am for this. it would have to be half the sales tax. they don't have union, bricks and mortar, all that stuff. i think you got to reverse it. take the sales tax off the bricks and mortar. best buy has a chance against

everybody online. and the mom and pop stores, take the sales tax off them, put a slight one online, we'll ends up with more revenue. >> they're not going to do get where i disagree with you is easy, they're not going to lower marginal tax rates on the other side. i want to ask you this, these small retailers, the bricks and mortars, they're not tax collections for 9,600 jurisdictions as kelly ayotte pointed out. let the states collect their own taxes if there is an issue there, dan. >> larry, you know this court decision reached in 1992 was for catalogue mail order sales. obviously, the technology today is and this bill requires states to give retailers software to compute whatever the tax rates are due. you today, larry, when you buy, you can push a button, this is my zip code, there are six option, the soft 2004 will keep track of it, will actually remit

to others. that's just a red herring na there is 9,600. >> i only have 50 seconds. we'll give you the last word. >> we have to have our online businesses reline on a tax software. any kind of jurisdiction changes their software, they have to figure it out. it's unprecedented to make your businesses tax collect ovrs for the nation. >> dan griffith, mark simone, i appreciate it very much. that's it for tonight's show. i get one view of my bank and brokerage accounts with one login... to easily move my money when i need to. plus, when i call my local scottrade office, i can talk to someone who knows how i trade. because i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade. awarded five-stars from smartmoney magazine. how sharp is your business security?o! can it help protect your people and property, while keeping out threats to your operations?

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